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-- iconic American city known as the hub of the auto industry is now running on empty financially.
Insolvent is the word that's being used for Detroit the ghost town pictures really tell it on a report finds that the city doesn't have the cash it needs to keep.
Keep this up operating here is part of the reason why the city's deficit is expected to reach 100 million dollars by next month that's the end of the fiscal year.
Its population has plummeted to 700000.
That's less than you know half of what they had.
About a decade ago.
And employment -- -- is that seventeen and a half percent.
More than twice the national rate Steve -- and senior economics writer for the Wall Street Journal we have a lot of big -- to get to today -- that when it comes the economy we don't want -- forget that.
And you say that Detroit is it is it's a canary in the coal mine too for the country.
Why why do you think that.
Well really really is John and then let me just say -- that that this is a very sad story of as they -- -- an iconic American city motor city used to be the -- of industrial progress in this country and to see.
How low it has -- is really a sad story for the country.
That and what worries me and the reason I think this is the canary in the coal mine -- This is a city that cannot pay its bills.
It is running out of money it is teetering right on the edge of bankruptcy right now John and I worried that this is going to happen a lot of other major cities of the reason for that -- Is cities have been and we you what I've talked about this on the show many times these -- huge.
Pension time bombs that are embedded in city budgets are now coming back that they're they're now detonating -- cities they can't pay their bills because they're paying all these retired people that -- even providing services.
For every one person employed in Detroit -- -- people retires they give us an idea of unbelievable some of the bounce the USC -- -- of the the other side of the story to which is that.
The police department to trade has had a series of different police chiefs over the last several years -- that report -- -- -- it's managing potentially the city's bankruptcy we don't know if that's what what will happen.
Says that that's a major issue of the other major issue that is -- the fire department to fit them.
May not be working so where do you even start here.
In a city like this to get back on its feet.
Well you know about a year ago or so I I interviewed for the newspaper the Wall Street Journal why -- hurt.
I gave -- who's the mayor he's doing every -- yeah I I have a lot of faith in him.
But you know I think the real problem is these embedded in what we call legacy costs of contracts and and obligations that were made long long -- golf.
That -- now coming back and running the city.
And and this could happen at throughout the country and meet you in California right now John -- there are four or five major cities that are in the same.
Financial straits as as Detroit has so what gets you this Reebok.
What did you think at that point that -- that question know what what what do you well that's just where I was going with this Jenna.
What what these cities -- great deal I mean I predict this on your shop these cities very soon are gonna come to -- -- -- And they're going to request a federal bailout that taxpayer bailout from citizens around the country to bailout these settings it's something I don't think most -- Americans want a deal how great talent so we have to bail out mission Michigan and Detroit in the past we just need a bailout the auto industry self.
I but I think that's where this is going I think these cities are gonna come to Washington had a hand -- say give us money.
-- of the union leaders in Detroit.
Says this this whole restructuring or attempted restructuring is a sham a -- deal for them meaning the people to come -- to take control of the city.
And it's assets so there's a lot of play a lot of emotion Siva have you back to talk more about the story is not going anywhere unfortunately.
Thank you see you soon got to thank you.
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